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Compare mutual funds vs cds?

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17th Nov 2009 by Joseph Pousada

Cds (Certificates of Deposits) are banking products. In the United States these are typically FDIC insured up to the allowed amount per client per institution. Please consult your authorized banker to determine the aggregate FDIC coverage for your account at that institution and to go over any CD product to see if it is right for you. Unlike the interest bearing checking or savings accounts offered at the bank CDís are designed for a fixed amount interest for a fixed period of time. If you choose to withdraw your funds prior to the ending time period there are usually penalty fees associated with doing so.

In the United States mutual funds are open end investment companies, not considered banking products and are not FDIC insured. Mutual funds are considered investment securities which signifies that the investor bears the full risk of loosing the principal investment amount made and should consult their Financial Advisor before investing. When investing mutual funds will issue new shares to the investor based on the next pricing of the fund. There are various types of mutual fund investment companies, from some that focus on Fixed Income to some that focus on Small Cap Investments. There are also different investment styles from Growth Investing to Value Investing to Socially Responsible Investing. There are load funds in which there would be a sales charge and those that do not called no-load funds. Consult your financial advisor to go over all your options for investing and how the different investment options will fit in with your investment portfolio.

Reference:
http://www.finra.org/Investors/SmartInvesting/ChoosingInvestments/MutualFunds/
http://en.wikipedia.org/wiki/Certificate_of_deposit
http://www.fdic.gov/

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9th Nov 2009 In Mutual Funds 1 Answers | 597 Views
Subjects: cds, mutual funds,

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